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Whew. The iShares Biotechnology Index ETF (NASDAQ: IBB), which tracks the NASDAQ Biotech Index, has been hammered since the beginning of 2016. It's fallen almost 15% in a matter of weeks, a clear sign that investors are in near-panic mode. Whenever that happens, people sell risk. You have a lot of people who just can't take the loss of sleep anymore.

That's a strong signal that it could be time to step in and buy. But an extra dose of caution is advised, because drug pricing is in many candidates' crosshairs this presidential election year. Still, no matter who wins the election, it's unlikely that Congress will act rapidly to overhaul drug pricing in the United States. And the headline risk is probably less than expected, as the stump speeches and tweets could quickly turn to focus on numerous other political hot buttons -- in short, whatever makes the poll numbers rise.

Meanwhile, while the biotech industry may be in a lull, with fewer than usual clinical breakthroughs announced recently, its growth isn't over. Not only is the amount of continuing innovation tremendous, but the industry demographics have also never been better. Citing IMS Health, annual healthcare and drug spending could rise 29%-32% to $1.4 trillion  by 2020 because of drug breakthroughs, the aging population, and greater healthcare spending in developing economies.

So what should investors be looking at? Here are three biotechs our contributors believe have significant upside potential in 2016.

Sean Williams: Although the year is getting off to a bumpy start for all stocks, not just biotech, if you're a biotech-savvy investor looking for a company with an intriguing risk-versus-reward, I'd encourage you to look at clinical-stage drug developer Agios Pharmaceuticals (NASDAQ:AGIO).

Although Agios is involved in some relatively early stage work on pyruvate kinase deficiency -- a genetic disorder that affects red blood cells' ability to carry oxygen -- it's the company's oncology platform that's most exciting. Specifically, Agios' work with IDH mutant inhibitors is what has me, and Wall Street, excited. Normal IDH enzymes help to generate energy for cells by breaking down nutrients; however, mutant IDH creates a molecule that fails to mature and tends to proliferate rapidly. Thus, Agios' approach of inhibiting this mutant form of IDH (IDH1 and IDH2) is believed to have anti-cancer effects.

Agios' work is so exciting it got the attention of Celgene (NASDAQ:CELG) years ago, with Celgene eventually licensing the rights to IDH2 mutant inhibitor AG-221, and IDH1 mutant inhibitor AG-120. At the American Society of Hematology's annual meeting in December, Agios announced that AG-221 generated an evaluable response in 37% of patients with relapsed or refractory acute myeloid leukemia (AML). That may not seem like a lot, but this phase 1/2 study suggests that Agios' AG-221 could become a standard of care with response rates this high in recurrent AML patients if it continues to succeed in larger trials. That'd be good news for licensing partner Celgene and great news for the currently product-less Agios.

In 2015, Agios initiated a number of phase 1 trials and phase 1b extension studies pertaining to relapsing and refractory AML, front-line AML, myelodysplastic syndrome, and other solid tumor candidates for both AG-221 and AG-120. In Q1 2016, we'll also see a phase 1/2 trial initiated for both IDH mutant inhibitors in combination with Vidaza for frontline AML. What this means is a practical conveyer belt of data could be coming investors' way in the second half of 2016 and perhaps early 2017. Investors love clinical data, and I suspect it could be promising.

Agios could really surprise investors in 2016.

Selena Maranjian: A biotech behemoth to consider buying in 2016 is Amgen (NASDAQ:AMGN), which recently sported a market value near $117 billion and a dividend yield of 2.5%. Speaking of dividends, Amgen's has been growing briskly and was raised by a whopping 27% in December -- and that's not even an unusually large increase, as raises have averaged 29% annually over the past four years. With a payout ratio below 40%, it has plenty of room for further increases.

Biotech companies live or die based on drug approvals. Based on that, 2015 was a good year for the company, with six major regulatory approvals won as of mid November -- two of which, Kyprolis (tackling multiple myeloma) and Repatha (addressing high cholesterol), are expected to achieve billion-dollar blockbuster status. Amgen recently had seven drugs posting double-digit year-over-year growth, and its pipeline features dozens of drugs, many of them nearing the finish line in phase 3 trials.

Of particular interest are biosimilars -- which are biologically produced drugs similar to but not necessarily identical to existing formulas. (Generic drugs, on the other hand, are simpler, chemically derived formulations that are essentially identical to whatever drug they're aiming to copy.) As my colleague Sean Williams has noted, "Amgen has nine biosimilar drugs in its pipeline, including ABP 501, which is a clinical equivalent to Humira, the best-selling drug in the world." Amgen estimates that its current biosimilar lineup has the potential to generate about $3 billion in annual revenue.

Our growing and aging population ensures a steady demand for more and new drugs, and Amgen is well positioned to profit from that.

Cheryl Swanson: Thanks to big-picture breakthroughs in harnessing the immune system to fight cancer, immunotherapy biotechs are attracting enormous attention in both the scientific and investment worlds. A top pick in that field could well be developmental-stage Juno Therapeutics (NASDAQ:JUNO). Although it has growing competition from companies such as Kite Pharma, Juno's drugs not only have huge commercial potential, but they could also change the treatment paradigm in cancer.

That said, Juno is strictly for high-risk investors, since it's one of the most volatile stocks in the healthcare universe. Ordinarily, it's far too rich for my blood, but Juno's currently at its 52-week low. That's due to a 20% drop in December, when the company reported side effect issues for its candidate drugs JCAR015 and JCAR014. Such effects are well-known problems with CAR-T therapies, and what went almost unnoticed (probably because of the downside momentum driving the stock) was the solid clinical response against acute lymphoblastic leukemia.

More recently, at the J.P. Morgan Healthcare Conference, Juno raised quite a stir when it announced that it had acquired Harvard spinout AbVitro, a private biotech that has a single cell-sequencing platform. Why the fuss? AbVitro's technology could help engineer T-cells against a much broader range of targets. Those include solid tumor indications, such as lung, breast, and prostate cancers. These cancers have a much larger target population.

While three to five years could pass before any of its candidate drugs are commercially available, Juno's 10-year, $1.3 billion deal with Celgene should give it ample resources to advance its clinical program without eroding shareholder value through dilution.

Bottom line
There's no way of telling how long the rough patch in biotechs, and the general market, will last. But at some point, the appetite for risk will swing the other way. If you're looking for biotechs with lots of potential to move in the right direction, keep an eye on the aforementioned stocks.

Cheryl Swanson owns shares of AGIOS PHARMACEUTICALS INC and Amgen. Sean Williams has no position in any stocks mentioned. Selena Maranjian owns shares of Amgen and Celgene. The Motley Fool owns shares of and recommends Celgene. The Motley Fool recommends Juno Therapeutics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.